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The long saga of the Georgia State University (GSU) e-reserves case continues as the Court of Appeals for the Eleventh Circuit reversed the district court’s ruling which had found that the vast majority of GSU’s use of works in its e-reserves constituted a fair use. This is the second time the Eleventh Circuit has reviewed the case, and the second time it has reversed.

In 2008, publishers sued GSU for copyright infringement, arguing that the use of unlicensed excerpts of copyrighted works in the e-reserves constituted infringement. GSU defended itself, relying on the right of fair use. In the first bench trial, the district court ruled in favor of fair use for 43 of the 48 cases of alleged infringement. The Eleventh Circuit reversed and remanded the case in 2014, directing the lower court to re-examine its weight to market substitution and re-evaluate the four fair use factors holistically, rather than taking an arithmetic approach (i.e., if three fair use factors favor the use, but one disfavors it, fair use should always apply). On remand, the district court re-evaluated the four factors and found that 44 of the 48 cases constituted fair use. In her analysis, Judge Evans assigned each factor a weight: “The Court estimates the initial, approximate respective weights of the four factors as follows: 25% for factor one, 5% for factor two, 30% for factor three, and 40% for factor four.” The publishers again appealed to the Eleventh Circuit, which heard the case in 2017. (Here’s a link to ARL’s amicus brief in the second appeal.)

On October 19, 2018, the Eleventh Circuit released its 25 page opinion—more than a year after hearing oral arguments in the case—finding that the district court again erred in its evaluation of fair use. The Eleventh Circuit suggests that the district court was only mandated to re-evaluate its analysis on the second and third factors, but had instead also re-evaluated its analysis on factor four (in which the district court found in the first trial that in 31 cases, the fourth fair use factor weighed against fair use).

Additionally, the Eleventh Circuit points out that “The district court again applied a mathematical formula in its overall analysis of fair use,” which it had been instructed against. Although the district court couched the given weights as “initial” and “approximate,” the Eleventh Circuit found that the district court only adjusted these factors in four instances and di not adjust the other factors in the overall analysis. Thus, “We conclude that the district court’s quantitative rubric was an improper substitute for a qualitative consideration of each instance of copying in the light of its particular facts.” The Eleventh Circuit has remanded the case, directing the district court to use a holistic approach to fair use, and avoid any mathematical approach with respect to the four factors.

Another issue the Eleventh Circuit opinion addresses is whether the cost of purchasing licenses affects the third factor; the district court in the second trial considered the price of use on two ocassions. The Eleventh Circuit rules that price should not be taken into account when evaluating the amount and substantiality of the portion of the work used.

While the Eleventh Circuit reversed and remanded on the above issues, it affirmed the district court’s decision not to reopen the record. Publishers in 2015 filed a motion to reopen, asserting the need to introduce “Evidence of GSU’s ongoing conduct (e.g. its use of E-Reserves during the most recent academic term)” as well as evidence of the availability of digital licenses. Here, the Eleventh Circuit notes that this decision is within the discretion of the trial court.

Kevin Smith posted about the GSU case on In the Open, with an excellent summary of what the Eleventh Circuit’s opinion (as well as its last opinion) does not do, and what, as a result, the publishers have lost on:

…But the big principles that the publishers were trying to gain are all lost. There will be no sweeping injunction, nor any broad assertion that e-reserves always require a license. The library community will still have learned that non-profit educational use is favored under the first fair use factor even when that use is not transformative. The best the publisher plaintiffs can hope for is a split decision, and maybe the chance to avoid paying GSU’s costs, but the real victories, for fair use and for libraries, have already been won.

The brief opens by noting that that the continued appeals in the case are unnecessary:

Appellant Publishers (“Publishers”) and their amici don’t know when to quit. Publishers could have declared victory in 2009, when GSU modified its e-reserves policy in response to the initiation of this lawsuit. Publishers could have declared victory in 2014 after this Court reversed the district court’s 2012 decision and provided detailed guidance on how fair use principles should be applied to e-reserves. Publishers could have concluded this litigation after the district court refused to re-open the record on remand. Instead, Publishers doggedly pursue their claims concerning excerpts used in three school terms, eight years ago.

The brief then urges the Eleventh Circuit to affirm the lower court’s decision. In doing so, the brief notes that GSU’s copyright policy is consistent with the ARL Code of Best Practices for Academic and Research Libraries. The brief also suggests that the district court’s analysis of the second fair use factor (nature of the work) was flawed and the context of the works actually favors fair use. Finally, the brief notes the importance of the public interest in considering the fourth fair use factor (market harm).

On the second factor, the brief states that analysis of the second factor should be focused on “ascertain[ing] whether copyright was needed to incentivize creation and, by extension, whether or not a fair use finding helps serve the purposes of copyright.” The brief points out that the scholarly community is a “gift culture” and while

We do not suggest that scholarly works should receive no copyright protection. But we do agree with Judge Posner that copyright-based incentives are less necessary in the context of many academic works to serve copyright’s own fundamental goal: to further the progress of science. Because scholarly works require “thinner” copyright protection to ensure their production, the second factor strongly favors a fair use finding with respect to all of the works at issue here.

With respect to the fourth factor, the brief points the constraints of library budgets and the growth of open access publishing. It states that,

Placed in this context, it is clear that the public benefit of e-reserve practices such as GSU’s far outweighs any potential cost to publishers. Although some academic publishers may have difficulty adjusting to the digital environment, predictions of the devastating impact the decision below would have on the evolving scholarly communications ecosystem are complete fiction.

In recent testimony (both written and oral) at the House Judiciary Subcommittee on Courts, Intellectual Property and the Internet Hearing on Copyright Issues in Education and for the Visually Impaired, Allan Adler, representing the Association of American Publishers, asserted that in the Georgia State e-reserves case, the Eleventh Circuit erred in rejecting applicability of the media neutrality doctrine, the principle that copyright law should apply in a similar manner to similar works in different media. Invoking the media neutrality doctrine, Mr. Adler essentially argued that the “coursepack” cases – Basic Books Inc. v. Kinko’s Graphics Corp. and Princeton University Press v. Michigan Document Services – should control and that the use of copyrighted material in Georgia State’s e-reserves was not fair use. This argument ignores several important points regarding the facts of the case, including the fact that the coursepack cases were distinguishable on grounds that had nothing to do with media neutrality.

First, the coursepack cases do not apply because material placed in electronic reserves are not the equivalent of material that is collected and bound together in a coursepack. A coursepack is like an anthology sold to all the students in a course, which the students can place on their bookshelves and continue to use long after the end of the course. By contrast, in an e-reserves system, the university provides students with temporary access privileges that terminate at the end of the semester. A student can continue to access the materials that were in the course e-reserves only if the student became the volitional actor by printing out the materials while she still had access to them. That copying by a student for her personal use unquestionably is a fair use. The media neutrality doctrine applies only in cases where the cases are truly analogous.

Additionally, the coursepack cases are not controlling because the circumstances of those cases were very different than the facts in Georgia State. In particular, the coursepack cases clearly involved commercial, for-profit copy shops and the coursepacks were sold to students for a profit. By contrast, the e-reserves at issue were run by Georgia State University, a non-profit educational institution and the use was also a non-profit, educational use. This distinction is significant under the first fair use factor which looks at “the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes.” As the Eleventh Circuit pointed out in rejecting the coursepack cases that in these cases:

. . . the nontransformative, educational use in question was performed by a for-profit copyshop, and was therefore commercial . . . [Courts have] refused to allow the defendants, who were engaged in commercial operations, to stand in the shoes of students and professors in claiming that their making of multiple copies of scholarly works was for nonprofit educational purposes.

However, in both of the coursepack cases, the courts expressly declined to conclude that the copying would fall outside the boundaries of fair use if conducted by professors, students, or academic institutions. See Princeton University Press, 99 F.3d at 1389 (“As to the proposition that it would be fair use for the students or professors to make their own copies, the issue is by no means free from doubt. We need not decide this question, however, for the fact is that the copying complained of here was performed on a profit-making basis by a commercial enterprise.”); Basic Books, 758 F. Supp. at 1536 n.13 (“Expressly, the decision of this court does not consider copying performed by students, libraries, nor on-campus copyshops, whether conducted for-profit or not.”).

Reliance on the coursepack cases is therefore misguided as they involved off-campus, for-profit copy shops rather than non-profit educational institutions. The courts in these coursepack cases explicitly note that the holdings of these cases do not reach the issue of copying by students, professors, libraries, or the academic institutions. In Georgia State, the e-reserves system was clearly run by the university. The coursepack cases are therefore distinguishable based on the analysis done under the first fair use factor.

Additionally, the coursepack cases are clearly not binding precedent on the Eleventh Circuit. These cases were decided in different jurisdictions – in a district court in New York and by the Sixth Circuit – and therefore not controlling. While the decisions in these cases may have had persuasive value, even if they had analogous fact patterns such opinions would not bind the Eleventh Circuit.

Finally, the decisions are more than 15 years old. Fair use jurisprudence is always evolving. There is no way to know if courts in the Second and Sixth Circuits would reach the same conclusion today that they reached in the last millennium.

While the media neutrality doctrine is an important copyright principle, it – and the coursepack cases – simply do not apply in the Georgia State decision. The Eleventh Circuit correctly rejected this holdings in this line of cases when considering the fair use of Georgia State’s e-reserves system.

On Friday, October 17, 2014, the Eleventh Circuit released its long-awaited decision in the Georgia State University (GSU) e-reserves case. Some key takeaways from the majority opinion include:

Affirms that fair use is applied on a case-by-case basis;

Rejects bright-line rules, such as using a ten-percent-or-one-chapter rule to allow fair use (a rule that the district court adopted);

Affirms that even if a use is non-transformative, a nonprofit educational purpose can still favor fair use;

Rejects applicability of the coursepack copying cases;

Finds that a publisher’s failure to offer a license will tend to weigh in favor of fair use in terms of the fourth fair use factor; and

Gives weight to a publisher’s incentive to publish, rather than focusing on the author’s incentive to create.

Another positive aspect of the case is the Eleventh Circuit’s discussion of the purpose of copyright, affirming the fact (as has long been held by the Supreme Court) that copyright is not a natural right of the author, but rather, is designed to stimulate creativity and progress for the public good. Nancy Sims has an excellent analysis of the court’s ruling covering what she liked and didn’t like from the opinion.

It is important to note that while the case has been reversed and remanded, the Eleventh Circuit did not rule against GSU. Instead, the Eleventh Circuit directed the district court to revisit its fair use analysis and not to take an arithmetic approach to the four fair use factors (rejecting the notion that if three of the factors favor fair use, but one disfavors fair use, then fair use will always apply).

Thus, e-reserves remain alive and well, though the exact policies on fair use for e-reserves at some institutions may need to be revisited in light of this case, particularly those that rely on a checklist. Although the Eleventh Circuit’s methodology is binding only on Alabama, Florida and Georgia, this case is persuasive authority in other jurisdictions.

Here’s what the court had to say on each of the four use factors:

Factor One (the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes): While GSU’s use was non-transformative, the nonprofit educational purpose of the e-reserves favors fair use.

The Eleventh Circuit upheld the district court’s finding on the first factor, determining that while the use of the Plaintiffs’ works was not transformative, the first factor favored GSU nonetheless. The court noted that the excerpts posted in the e-reserve system were verbatim copies converted into a digital form and were used for the same intrinsic purpose as the works. However, because GSU’s use was for a nonprofit educational purpose rather than a commercial purpose, the first factor favored GSU.

In finding that GSU’s use was for a nonprofit educational purpose, the court noted that the Supreme Court and Congress have favored fair use for educational purposes. The Eleventh Circuit noted that the user was a nonprofit educational institution and that the use of the works was clearly for educational purposes. It discussed the ways that GSU could have profited from the use or “commercially exploited” the work, but concluded that while Defendants could have profited from the use of the works (for example through collection of student tuition and fees) such reasoning is circular because any unlicensed use of a copyrighted work results in profit to the user and thus no use would qualify as nonprofit under the first factor. The Eleventh Circuit noted that GSU’s use of the works “provides a broader public benefit—furthering the education of students at a public university.” In sum, “despite the recent focus on transformativeness under the first factor, use for teaching purposes by a nonprofit, educational institution such as Defendants’ favors a finding of fair use under the first factor, despite the nontransformative nature of the use.”

Factor Two (nature of the copyrighted work): Factual works may include original expressive contents and relay more than bare facts, but this factor is of relatively little importance.

Here, the Eleventh Circuit states that highly creative works are entitled to greater protection, while the use of factual or informational work is more likely to favor fair use. The Eleventh Circuit rejected the district court’s holding that the second factor favored fair use in every instance because of the factual nature of the works-at-issue and found that the works still included expressive content. The court stated that where the works “surpass[] the bare facts necessary to communicate information, or derives from the author’s experiences or opinions, the District Court should have held that the second factor was neutral, or even weighed against fair use in cases of excerpts that were dominated by such material.” However, the court acknowledges that “the second fair use factor is of relatively little importance in this case,” noting that the works were neither fictional nor unpublished.

Factor Three (amount and substantiality of the portion used in relation to the copyrighted work as a whole): Blanket ten-percent-or-one-chapter rule is not appropriate; bright line rules must be avoided.

The Eleventh Circuit rejected the district court’s formulation favoring fair use under the third factor where GSU copied no more than ten-percent of a work or one chapter in the case of a book with then or more chapters. The court notes, “We must avoid ‘hard evidentiary presumption[s] … and ‘eschew[] a rigid bright-line approach to fair use.’” The Eleventh Circuit rejects this formulation even as a starting point in the analysis, finding that “application of the same non-statutory starting point to each instance of infringement is not a feature of a proper work-by-work analysis.”

In its discussion of the third factor, the Eleventh Circuit also rejected the Classroom Guidelines as indicative of what is permitted under fair use. The Eleventh Circuit noted that the Classroom Guidelines “do not carry force of law,” and furthermore, these guidelines “were intended to suggest a minimum, not maximum, amount of allowable educational copying that might be fair use, and were not intended to limit fair use in any way.” Here, the Eleventh Circuit references the coursepack cases, but finds that while they may provide guidance, they are not binding authority (both in terms of jurisdiction and the context).

Factor Four (effect of the use upon the potential market for or value of the copyrighted work): Market substitution is the primary concern; failure to offer a license should generally weigh in favor of fair use.

On the fourth factor, the Eleventh Circuit noted that the adverse impact of primary concern is market substitution and “[t]he central question … is not whether Defendants’ use of Plaintiffs’ works caused Plaintiffs to lose some potential revenue. Rather it is whether Defendants’ use—taking into account the damage that might occur if ‘everybody did it’—would cause substantial economic harm such that allowing it would frustrate the purposes of copyright by materially impairing Defendants’ incentive to publish the work.” The Eleventh Circuit’s apparent focus on the incentive to publish is a bit unusual, given that courts are generally focused on an author’s incentive to create rather than a publisher’s incentive to publish. Given the weight the Eleventh Circuit has given to a publisher’s incentive, academics should strongly consider open access publication options.

On the licensing point, the Eleventh Circuit found that “it is not determinative that programs exist through which universities may license excerpts of Plaintiffs’ works. In other words, the fact that Plaintiffs have made paying easier does not automatically dictate a right to payment … the ability to license does not demand a finding against fair use.” Furthermore, the court pointed to the lack of an available license as an “inference that the author or publisher did not think that there would be enough such use to bother making a license available” and in such cases, “the fourth factor should generally weigh in favor of fair use.

Finally, the Eleventh Circuit stated that the district court should have afforded the fourth factor greater weight due to the nontransformative nature of GSU’s use (as opposed to finding that each factor weighed equally in the district court’s arithmetic approach).

Ultimately, the district court will need to re-do its fair use analysis for each of the works-at-issue, consistent with the Eleventh Circuit’s opinion. In doing so, however, GSU could still prevail on its fair use claims.

Unless otherwise noted, posts after January 10, 2014 are written by Krista L. Cox, Director of Public Policy Initiatives at ARL. Some of the content here will not be written or created by ARL, but rather will be collected from elsewhere on the web. Quotation does NOT imply endorsement!

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02/19/2019 at 3:09pmI first saw this discussed on Twitter, now WaPo has an article on Justice Thomas' concurrence in a denial of cert, but that urges reexamining the 1st & 14th Amendments in libel cases (i.e. a reexamining of NYT v Sullivan) https://t.co/lCwY85MEO0